Wall Street Greek: Today's Business: Brown Pressured, Decent Jobs Data, Bernanke Testifies

today's business brown pressured jobs data Bernanke testifies

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Today's business news schedule offers a busy slate, with three economic reports released in the pre-market and another two scheduled for the early morning. We found the early jobs data mildly positive, and for once we believe the Challenger Job-Loss Report will prove a market-moving factor, and a positive one at that. There's a trend of decline visible in announced corporate layoffs, and that's a great thing. Unfortunately, troubles are mounting overseas. Our prediction that several European governments would be toppled this summer seems to be showing signs of truth in the off-European U.K.

Today's Business

Overseas Markets

Asia:

MSCI Asia APEX 50: +0.82%

Japan NIKKEI 225: +0.38%

Hong Kong Hang Seng: +1.02%

China CSI 300: +2.59%

India BSE SENSEX 30: -0.03%

Europe:

DJ Euro STOXX 50: -0.98%

UK FTSE 100: -1.93%

France CAC 40: -1.17%

Germany DAX: -0.65%

(Prices as of hour of publishing, which may not be the close)

Gordon Brown's Government Challenged

U.K. Prime Minister Gordon Brown is said to be under pressure today, as a fourth Minister of his government resigns. This latest resignation has come as the result of a scandal, reflecting poorly on the boss-man. The Prime Minister criticized his Communities Secretary, Hazel Blears, after it was exposed by the Daily Telegraph that she did not pay taxes on the sale of a property upon which she had claimed taxpayer-funded expenses. She later paid a sum, but Brown called her behavior "totally unacceptable." Still, the populous may hold him responsible, and this marks his fourth lost Minister!

With the nation under economic stress, Brown is feeling pressure to replace his Chancellor of the Exchequer (akin to our Treasury Secretary), Alistair Darling. The feeling is that too many supports have fallen beneath Brown for him to retain his leadership role. Recall, we were an early voice declaring that many governments will turn over in Europe this summer, as socialist citizenry finds unemployment offers available time, and the heat inspires enough catalystic annoyance to hit the streets in protest.

Challenger Job-Cuts Report

Challenger, Gray & Christmas produced its Challenger Job-Cut Report earlier this AM. Challenger tracks announced corporate layoffs. This month's data showed job cuts summed to 111,182, which compares against the 132,590 layoffs posted for April. There's a clear trend of improvement visible now, as this May's decline continued a line stretching for four straight months.

ADP Private Employment Report

ADP published its Private Employment Report this morning, which measures changes in private employment within industrial sectors. It's the precursor to the government's Employment Situation Report scheduled for Friday. ADP's data for May showed improvement, but unfortunately, it came off of a revised worse April result. May's nonfarm payroll loss, as recorded by ADP, showed a 532K monthly decline. That compared against April's revised nonfarm job loss of 545K, which was adjusted from the initially reported loss of 491K nonfarm payrolls in April. The number coincides with forecasts for Friday's government report, which includes public sector jobs, and offers a net negative for trading today. Still, Challenger seems to overwhelm this report today.

Weekly Mortgage Activity

The report produced by the Mortgage Bankers Association showed a precipitous drop in Mortgage Activity, largely impacted by a likewise sharp rise in long-rates and possibly also swayed by the Memorial Day Holiday. The MBA's Market Composite Index dropped 16.2% even after adjustment for the holiday, but we wonder how well the adjustment covered the difference. The Refinance Index collapsed 24.1%, as contracted 30-year fixed rates jumped to 5.25%, from 4.81%. There was a bit of good news to be found though, as the Purchase Index, which is tied to home buying activity, increased 4.3% despite the rate rise. This marks a positive trend that we've smartly noticed as well. The bottom is setting for housing.

Factory Orders Report - April

Factory Orders will be reported for the month of April later this morning, with Bloomberg's consensus of economists forecasting a 1.1% rise. That compares against the 0.9% drop posted in March. Economists see a lift in factory orders, because of the already reported durable goods orders data that showed a burst of 1.9%. However, several recent "green shoots" have really been products of mirage, as prior-month results have been revised lower. In this case, durables for March were revised lower to a 2.1% decline for the month, allowing for the big gain in April's number. We expect a similar result here.

ISM Non-Manufacturing Report

ISM produces its Non-Manufacturing Report at 10:00 a.m. Economists see this important service sector measure improving. ISM's Composite Index is seen reaching 45.0 for May, versus the 43.7 level seen in April. Earlier this week, ISM's Manufacturing data was reported improved, but readings short of 50.0 still signify a recessionary environment, or rather that expectation by industry participants.

Federal Reserve Activity - Must See TV

It's time to tune into C-SPAN for "must see TV." At 10:00 a.m., Federal Reserve Chairman Bernanke will testify before the House Budget Committee on the economy and financial conditions. You can catch it by visiting the Wall Street Greek website, where you can click through to C-SPAN or listen in at Bloomberg Radio. As you know, Congressional testimonies like this have produced some of the best television this season, raising C-SPAN into position to compete with the likes of popular media. Okay, not really... but it plays big in "The Greek's" cave anyway. In other Fed news, Kansas City Fed President Thomas Hoenig will address a group in Wyoming in the afternoon.

EIA Petroleum Status Report

Look for the regular EIA Petroleum Status Report at 10:30 a.m. Last week's data showed crude oil inventories decreased by 5.4 million barrels. Oil is flirting with $70+ now thanks to green shoots and growing expectation for economic recovery. OPEC would like to see oil priced above $75, so it will not provide any production support for gas guzzling Americans any time soon. President Obama is in the Middle East today, and will likely ask for a little help on that front.

Corporate News Drivers

The earnings report schedule includes news from luxury home builder, Toll Brothers (NYSE: TOL), and DHA pioneer, Martek Biosciences (Nasdaq: MATK). The schedule includes ADC Telecommunications (Nasdaq: ADCT), Amerco (Nasdaq: UHAL), Collective Brands (NYSE: PSS), Comtech Telecommunications (Nasdaq: CMTL), Copart (Nasdaq: CPRT), Cyberonics (Nasdaq: CYBX), Dynamex (Nasdaq: DDMX), DynCorp Int'l (NYSE: DCP), G-III Apparel (Nasdaq: GIII), Gander Mountain (Nasdaq: GMTN), Greif Brothers (NYSE: GEF), Joy Global (Nasdaq: JOYG), LTX-Credence (Nasdaq: LTXC), Mechel Open Joint Stock (NYSE: MTL), SAIC, Inc. (NYSE: SAI), Shanda Interactive Entertainment (Nasdaq: SNDA), Williams-Sonoma (NYSE: WSM) and more.